² For recent assessments of this government's economic policies see Cairncross, A., Years of Recovery: British Economic Policy 1945–51 (London, 1985)Google Scholar; Barnett, C., Audit of War (London, 1986)Google Scholar; Tomlinson, J., ‘Mr Attlee's supply-side socialism’, Economic History Review, 47 (1993), pp. 1–22CrossRefGoogle Scholar; Mercer, H., Rollings, N. and Tomlinson, J. (eds), Labour Governments and Private Industry: The Experience of 1945–51 (Edinburgh, 1992).Google Scholar

³ Pimlott, B., Hugh Dalton (London, 1985), pp. 459–60.Google ScholarHowson, S., British Monetary Policy 1945–51 (Oxford, 1993)Google Scholar, is the first work to take a serious look at this conservatism, though her focus of concern is monetary policy, not how finance related to Labour's approach to planning.

⁴ Marwick, A., ‘Middle opinion in the Thirties: planning, progress and “political agreement”‘, English Historical Review, 79 (1964), pp. 285–98Google Scholar; Addison, P., The Road to 1945 (London, 1975)Google Scholar; Jeffreys, K., ‘British politics and social policy during the Second World War’, Historical Journal, 30 (1987), pp. 123–44CrossRefGoogle Scholar; Brooke, S., ‘Revisionists and fundamentalists: the Labour Party and economic policy during the Second World War’, Historical Journal, 32 (1989), pp. 157–75CrossRefGoogle Scholar; Lowe, R., ‘The Second World War, consensus, and the founding of the welfare state’, Twentieth Century British History, 1 (1990), pp. 152–82.CrossRefGoogle Scholar

⁵ Brooke, , ‘Revisionists’, p. 160.Google Scholar

⁶ Pollard, S., ‘The nationalisation of the banks: the chequered history of a socialist proposal’, in Martin, D. E. and Rubinstein, D. (eds), Ideology and the Labour Movement (London, 1990), p. 172.Google Scholar

⁷ Ibid., pp. 172–3.

⁸ Durbin, E., New Jemsalems: The Labour Party and the Economics of Democratic Socialism (London, 1985), p. 268.Google Scholar

⁹ (Radcliffe) Committee on the Workings of the Monetary System, Mins of Evidence, Q.12558 (HMSO, 1959).Google Scholar Robin Marris records it being a popular joke in the 1950s that the key to changing the machinery of economic policy would be to nationalise the Bank of England: Tite Machinery of Economic Policy (London, 1954), p. 25.Google Scholar

¹⁰ Howson, , British Monetary Policy, pp. 113–17Google Scholar; Fforde, J., The Bank of England and Public Policy 1941–1958 (London, 1992), ch. 1.Google Scholar

¹¹ Pollard, , ‘Nationalisation’, pp. 176–8.Google ScholarDurbin, , New Jerusalems, pp. 155–6.Google Scholar See also Radice, E. A., ‘Commercial banks and credit’, in Cole, G. D. H. (ed.), What Everybody Wants to Know About Money (London, 1937), esp. pp. 196–7.Google Scholar

¹² Radice, , ‘Commercial Banks’, p. 197.Google Scholar This approach to the role of financial institutions reflected the widespread belief that these institutions should play a greater role in ‘rationalising’ staple industries. In fact the main initiative in this came from the Bank of England, via the creation of the Bankers Industrial Development Corporation and the Securities Management Trust: Sayers, R. S., The Bank of England (Cambridge, 1976), vol. 1, ch. 14.Google Scholar The Bank was also active in help for the Special Areas, i.e. areas of high unemployment. But as so often with the Bank, its role was limited and often aimed at preempting more radical initiatives by others, usually government: Carol Heim, E., ‘Limits to intervention: the Bank of England and industrial diversification in the depressed areas’, Economic History Revietv, 37 (1984), pp. 533–50.CrossRefGoogle Scholar

¹³ Liberal, Party, Industrial Inquiry (‘Yellow Book’) (London, 1928, republished 1978), pp. 111–15Google Scholar, though this proposal is unclear on how far the Board will regulate private investment; Durbin, , New Jerusalems, p. 51Google Scholar; Pollard, , ‘Nationalisation’, pp. 170–3.Google Scholar

¹⁴ Durbin, , New Jerusalems, pp. 207, 205.Google Scholar Keynes supported Labour's broad idea for the NIB, but wanted it to stick to ‘quantitative’ rather than ‘qualitative’ control of investment: Keynes, J. M., Activities 1931–1931: World Crises and Policies in Britain and America, Collected Writings, vol. XXI (London, 1982), pp. 133–7, 590–2.Google Scholar At the extreme right of the ‘progressive consensus’, Harold Macmillan, a future Conservative prime minister, supported the idea of an NIB in his The Middle Way (London, 1938), pp. 260–4.Google Scholar

¹⁵ Labour Party, Annual Conference Report 1932, p. 184.Google Scholar

¹⁶ Davenport, N., Memoirs of a City Radical (London, 1974), pp. 76–9, 246–9Google Scholar; Dalton, H., Memoirs, vol. I, The Fateful Years (London, 1957).Google Scholar

¹⁷ (Macmillan) Committee on Finance and Industry, Cmd. 3897, PP 1930/1931, vol. 13, paras. 397–403.Google Scholar

¹⁸ Howson, , British Monetary Policy, pp. 69–71.Google Scholar

¹⁹ Fforde, , Bank of England, pp. 704–26.Google Scholar

²⁰ Hague, D. C. and Wilkinson, G., The IRC (London, 1983)Google Scholar; Tomlinson, J., Government and the Enterprise since 1900: The Changing Problem of Efficiency (Oxford, 1994), ch. 10.Google Scholar

²¹ Labour Party, Currency Banking and Finance (London, 1932), pp. 2, 9, 10.Google Scholar

²² Dalton, H., Practical Socialism for Britain (London, 1935), ch. 22Google Scholar; Burridge, T., Clement Attlee: A Political Biography (London, 1985), p. 86.Google Scholar

²³ Labour Party, Full Employment and Financial Policy (London, 1944)Google Scholar; Trades Union Congress, Interim Report on Postwar Reconstruction, in Report of the Annual Congress of the TUC, 1944, esp. pp. 430–1Google Scholar; Craig, F. W. S., British General Election Manifestos 1900–1974 (London, 1975), p. 126.CrossRefGoogle Scholar

²⁴ Cairncross, , Years of Recovery, pp. 446–7.Google ScholarThe Financial Times (29 07 1946)Google Scholar commented sardonically on the NIC: ‘For all the Council's high-powered wisdom, however, we are now told that it is not worth summoning to Whitehall more than once a quarter.’

²⁵ Public Record Office (hereafter PRO), T233/61, National Investment Council; PRO, T228/81–3, National Investment Council, Minutes and Memoranda. Curiously, in his memoirs, Dalton said the creation of the NIC stemmed from ‘Tory requests when my Bank of England Bill was in Committee’: Dalton, , Memoirs, vol. II, High Tide and After (London, 1962), p. 96.Google Scholar

²⁶ PRO, CAB 128/2, Cabinet Conclusions, CM55(45), 22 Nov. 1945.

²⁷ PRO, CAB 71/19, Lord President's Committee Minutes, 16 Nov. 1945.

²⁸ House of Commons, Hansard, vol. 418, cols. 1547, 1551.Google Scholar During the Bill's progress it became the Borrowing (Control and Guarantee) Act, which more accurately summarised its purpose.

²⁹ Ibid., cols. 1556–7.

³⁰ Ibid., cols. 1606–12. Mayhew had been a major exponent of the idea of the NIB in the 1930s, and had recognised at that time that an effective Board would have to go beyond control of new issues: Mayhew, C., Planned Investment, Fabian Research Series 45 (London, 1939), esp. pp. 35–6.Google Scholar

³¹ On the history of controls see Dow, J. C. R., The Management of the British Economy 1945–60 (Cambridge, 1965), ch. 6Google Scholar; Rollings, N., ‘The Reichstag method of government’, in Mercer et al., Labour Governments and Private Enterprise.Google Scholar The objection to the NIB voiced by Dalton, that it would cut across parliamentary sovereignty, is not to be dismissed out of hand. Such sovereignty was dear to the heart of the Labour government, and helps to explain why that government failed to create a planning apparatus like that of Monnet's Commissariat Générale du Plan in France: Tomlinson, J., ‘The Iron Quadrilateral: political obstacles to reform under the Attice government’, Journal of British Studies (forthcoming, 1994).Google Scholar However, in the case of the NIB I think the evidence suggests this issue was not paramount, and the opposition was grounded on a much broader range of factors, discussed further below.

³² Tew, B. and Henderson, P. D., Studies in Company Finance (Cambridge, 1959)Google Scholar, suggest a figure close to that in Table 2, though differences of definition make a precise comparison difficult.

³³ Barna, T., ‘Those “frightfully high” profits’, Bulletin of the Oxford University Institute of Statistia, II (1949), PP. 213–26.Google Scholar This level of profitability seems to have been an unexpected feature of the postwar world. The Bank of England, for example, expected high taxation to reduce profits considerably as a source for investment after the war: Bank of England Archive, G14/155, 1968/2, Financial Policy – Internal Committee on Post-War Domestic Finance, 31 03. 1943Google Scholar; Tew, and Henderson, , Studies in Company Finance, ch. 2.Google Scholar

³⁴ PRO, T233/25, Borrowing (Control and Guarantees) Bill 1946, draft letter to President of Board of Trade, 11. 1945.Google Scholar

³⁵ PRO, CAB 134/63, Committee on Control of Investment, Draft Reports, 1949, draft of 23 07 1949, para. 1.Google Scholar

³⁶ Ibid., paras. 6, 18.

³⁷ Draft report 5 09. 1949, paras. 37–42, 51.Google Scholar

³⁸ Rollings, N., ‘British Budgetary Policy 1945–54: a Keynesian revolution?’, Economic History Review, 42 (1988), pp. 283–98.Google Scholar

³⁹ Howson, S., “Socialist monetary policy”: monetary thought in the Labour Party in the 1940s', History of Political Economy, 20 (1988), pp. 433–52CrossRefGoogle Scholar, and more generally Howson, , British Monetary PolicyGoogle Scholar; Hall, R. L. and Hitch, C. J., ‘Price theory and business behaviour’ (1937), reprinted in Wilson, T. and Andrews, P. W. S., Oxford Studies in the Price Mechanism, (Oxford, 1951), pp. 107–38.Google Scholar

⁴⁰ PRO, CAB 134/63, Committee on Control of Investment, Report, 5 Sept. 1949, para. 6.

⁴¹ Though the degree of government control over nationalised industry investment was less than many ministers hoped. By 1949 Morrison was arguing:

We ought to take a fairly early opportunity to review the powers of the government to control socialised industries. It is of great advantage to have brought the public utility services and certain basic industries under the control of public boards which can administer those services and industries in the private interest; but the government has a wider viewpoint of the public interest than the Boards, and I am far from happy that we are in a position to exercise the control on wide issues of policy which the national economy requires. (PRO, CAB 134/690, Socialisation of Industries Committee, ‘Government control over socialised industries’, 26 04. 49)Google Scholar

⁴² PRO, CAB 134/63, Committee on Control of Investment Minutes of 18/7/49; Ibid., Report, 5 Sept. 49, para. II. That it was so readily accepted by the government probably reflects the general unwillingness to operate a discriminatory industrial policy for fear of upsetting the consensual cooperative approach to the private sector: Tomlinson, ‘The Iron Quadrilateral’.

⁴³ For this context, see also Tomlinson, J., ‘Planning: debate and policy in the 1940s’, Twentieth Century British History, 3 (1992), pp. 154–74.CrossRefGoogle Scholar

⁴⁴ PRO, CAB 124/890, ‘Economic planning’, 10 10. 1945.Google Scholar

⁴⁵ The idea of such wage planning was a popular proposal in the 1940s, but came to nothing. See Tomlinson, J., ‘The Labour government and the trade unions’, in Tiratsoo, N. (ed.), The Attice Years (London, 1992).Google ScholarPubMed

⁴⁶ PRO, CAB 124/890, Mayhew, C. to Lord President, 13 10. 45.Google Scholar

⁴⁷ Tomlinson, ‘Planning debate’. Few economists at the time took a radically different view from Meade about the long-term aims of policy, though there were sharp differences over the speed of de-control. See, for example, R. F. Kahn at Nuffield College, Oxford, 24th Private Conference, ‘The Government's Controls of Industry and Trade’, 26–27 June 1948. There is a copy of this document in the Bank of England Archives, ADM14/24 803/7.

⁴⁸ Tomlinson, , ‘The Iron Quadrilateral’.Google Scholar

⁴⁹ Brooke, S., ‘Problems of “socialist planning”: Evan Durbin and the Labour government of 1945’, Historical Journal, 34 (1991), pp. 687–702.CrossRefGoogle Scholar

⁵⁰ Mercer, H.: ‘The Labour government and private industry 1945–51’, in Tiratsoo, The Attlee Years.Google Scholar

⁵¹ Rollings, N., ‘The Control of Inflation in the Managed Economy: Britain 1945–53’, unpublished PhD dissertation (Bristol University, 1991), pp. 231–2.Google Scholar

⁵² British Library of Political and Economic Science, London School of Economics, Piercy Papers, 15/91, letter from L. P. Finance Group to Chancellor of Exchequer, 4 Apr. 46.

⁵³ Ibid., 15/117, XYZ Correspondence, e.g. ‘Suggested reforms in financial machinery’, Oct. 1948.

⁵⁴ Ibid., 10/64, letter from NIC to Dalton, 22 July 47; a similar line was taken by Cripps, who in writing to Lord Catto, the Governor of the Bank of England, in December 1948, said: ‘during the past year important changes in the organisation for the scrutiny and control of the investment programme have been made, both within the machinery of government, and in contact with industry, through the Planning Board. I think you will agree that these changes greatly reduce the field over which the NIC could effectively work’: Bank of England Archives, G1/247 1396/2, ‘National Investment Council’. Davenport, a member of the NIC, regarded its abolition as a victory for the ‘Treasury Establishment’: Memoirs, pp. 154–5.Google ScholarDalton, too ‘regretted’ the abolition: High Tide, p. 98.Google Scholar

⁵⁵ Durbin, , New jerusalems, p. 74.Google Scholar

⁵⁶ Fforde, , Bank of England, pp. 704–26.Google Scholar The creation of ICFC and FCI was also urged on the Bank of England by the Treasury, eager to block more radical reform proposals emanating not only from the Labour Party, but also from the Board of Trade; e.g. Bank of England Archive, G15/110 2503/1, ‘Note on discussion of proposed Industrial Commission’, 13 04. 44.Google Scholar

⁵⁷ (Macmillan) Committee on Finance and Industry, Report.

⁵⁸ Cairncross, , Years of Recovery, pp. 444– 5.Google Scholar

⁵⁹ Howson, , ‘Socialist’ monetary policy', p. 564Google Scholar; idem, British Monetary Policy, ch. 2.

⁶⁰ Warwick University, Modern Records Centre, Federation of British Industry Archive, e.g. MSS 200/F/3/E3/8, FBI to Chancellor of the Exchequer, ‘Taxation and shortage of industrial capital’, 31 12. 48Google Scholar; MSS 200/F/3/E3/3/1O, FBI, Home Economic Policy Committee Report, 07 1948.Google Scholar This notion of finance ‘failing’ industry was to be revived in the 1970s, leading to the creation of the National Enterprise Board, which did have some success as a ‘venture capital’ provider, though not in its original, intended role as an interventionist body across the breadth of manufacturing industry: Tomlinson, , Government and the Enterprise Since 1900, ch. 9.Google Scholar

⁶¹ PRO, PREM 8/1183, ‘The state and private industry’.